United Kingdom guides

How to sell a business in the UK

Selling a business in the UK generally follows the same sequence: get the business ready and valued, market it confidentially, agree heads of terms, then let the buyer carry out due diligence before you sign and complete a sale contract. Whether the deal is structured as a share sale or an asset sale changes the tax you pay, what happens to employees under TUPE, and what liabilities you keep after completion.

By the bizflip team · Published 29 August 2026 · Facts checked 29 August 2026 · Sources listed below

Get the business ready and set a starting price

Buyers and their accountants will want to see at least three years of clean accounts, up-to-date management information, and a list of material contracts, leases, and intellectual property before they take an approach seriously. Tidy up anything that mixes your personal finances with the business — director's loans, personal expenses run through the company, informal family arrangements — because these surface in due diligence and slow a deal down.

Get an independent valuation before you set an asking price. Most UK small business valuations work from a multiple of adjusted profit — EBITDA or seller's discretionary earnings — with the multiple itself set by sector, size, growth, and how much of the business depends on you personally. Treat a valuation as a starting point for negotiation, not a guaranteed sale price.

Market the business under confidentiality

Most UK business sales are marketed anonymously at first — a short "teaser" describing the sector, location, turnover, and profit, without naming the business — so staff, customers, and competitors don't find out before you're ready. Serious buyers are usually asked to sign a non-disclosure agreement (NDA) before they see the business's name or detailed financials. A workable NDA sets out what's confidential, what the buyer may use it for, and how long the obligation runs.

Listing a business for sale doesn't have to cost anything — bizflip lists businesses for sale free of charge, for example.

Agree heads of terms, then go through due diligence

Once a buyer is serious, the next step is usually a heads of terms document (sometimes called a letter of intent), setting out the price, the proposed structure, and a timetable. Heads of terms are normally not legally binding on price or on completing the deal — but the exclusivity and confidentiality clauses inside them usually are, so read those before you sign.

Due diligence is the buyer's formal check of what they're actually buying. Expect requests in stages, starting broad and getting more specific:

Choose the structure: share sale or asset sale

A share sale transfers ownership of the limited company itself — the buyer buys your shares, and the company carries on as the same legal entity, with its history, contracts, and liabilities intact. An asset sale transfers specific assets out of the company — premises, equipment, stock, contracts, goodwill — while the company itself, and anything not sold, stays with you. Buyers often prefer asset sales because they can leave historic liabilities behind; sellers often prefer share sales for a cleaner, one-off exit.

Share saleAsset sale
What's soldShares in the companySpecific assets, chosen individually
Legal entitySame company continues, under new ownershipBuyer's own entity holds only what it bought
Historic liabilitiesUsually transfer with the companyCan usually be left behind
Employees / TUPEEmployer doesn't change — TUPE usually doesn't applyTUPE usually applies if the business keeps its identity
VATNot applicableMay apply, unless it qualifies as a going-concern transfer

The Transfer of Undertakings (Protection of Employment) Regulations 2006, usually called TUPE, protect employees when the business they work for transfers to a new employer. TUPE typically does not apply to a share sale, because the employer — the company — doesn't change. It typically does apply to an asset sale where what's sold is a business, or part of one, that keeps its identity under the new owner. Where TUPE applies, employees assigned to that part of the business transfer automatically on their existing terms and continuity of service; neither buyer nor seller can pick and choose who moves. The new employer cannot change those terms just because of the transfer, except for an economic, technical, or organisational reason involving changes to the workforce. Get employment law advice early if TUPE might apply — it affects headcount, contracts, and what staff are told, and needs handling before heads of terms are signed, not after.

Sign the contract and complete

The sale contract is a Share Purchase Agreement (SPA) for a share sale, or an Asset (or Business) Purchase Agreement (APA/BPA) for an asset sale. It sets out the price and any post-completion adjustments, the seller's warranties — statements about the business the seller stands behind — and a disclosure letter, in which the seller lists exceptions to those warranties. The disclosure letter is what limits your exposure to a claim after completion, so it needs care and usually a solicitor's input.

For most SME deals, exchange and completion happen on the same day. Larger or more complex deals sometimes exchange first and complete later, once conditions such as landlord or regulator consent are satisfied. At completion, the buyer pays, transfer documents are signed — a stock transfer form for a share sale, or the relevant asset transfer documents for an asset sale — and, for a share sale, the company's statutory registers are updated to reflect the new ownership.

Before you set an asking price or go to market, you can run bizflip's free valuation calculator at /valuation — it's ungated and shows its methodology, so you can see how the figure is built rather than take it on trust.

Tax and filings after the sale

Gains on selling a business are normally subject to Capital Gains Tax (CGT). If you qualify for Business Asset Disposal Relief (BADR), qualifying gains are taxed at 18% for disposals from 6 April 2026 (14% applied between 6 April 2025 and 5 April 2026, and 10% before that), up to a lifetime limit of £1 million of qualifying gains. To qualify on a share sale you generally need, for at least two years up to the sale, to hold at least 5% of the shares and voting rights, and to be an employee or officer of the company. Gains outside BADR are taxed at 18% or 24% depending on where they fall against your Income Tax band. Whether you qualify, and how much of your gain is covered, depends on your specific facts — check with your accountant or tax adviser before you agree a structure or a completion date.

On a share sale, the buyer normally pays Stamp Duty at 0.5% of the price, rounded up to the nearest £5, using a stock transfer form; it isn't charged where the price is £1,000 or less, and share sales don't attract VAT. An asset sale can attract VAT unless it qualifies as a "transfer of a business as a going concern" (TOGC) — broadly, the assets can operate as a business in the buyer's hands and the buyer intends to run the same kind of business — in which case no VAT is charged on the sale. Get this checked before completion; getting it wrong is expensive, either in VAT charged that shouldn't have been, or VAT that was due and wasn't charged.

After a share sale completes, the company must tell Companies House about the change. Updates to people with significant control and to director details are due within 14 days of the change, and issuing new shares must be reported within one month. A solicitor or accountant normally handles these filings as part of completion.

Sources

Every load-bearing claim in this guide, and where it comes from:

Ready for your own number? The valuation calculator is free and ungated, and its methodology is public.